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4 Tips to Protect Your Dealership from Synthetic Identity Fraud

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As if dealerships did not already have enough to worry about as the COVID-19 crisis continues to impact the market…now there is the increased concern over online F&I fraud. Since so many transactions are online now due to customers staying home and taking delivery at their houses, the risk of fraud, particularly buyers using false identities, has popped back into the F&I radar.

Identity theft is a crime that costs businesses and individuals millions of dollars a year. This crime involves stealing another person’s identity through high jacking their Social Security Number and other personal info to help open new credit account. It’s someone who has stolen your kids’ info since he is only 12 years old and has not applied for credit yet.

But there is actually something worse that dealers have to worry about. Synthetic Identity Fraud. Right up there with ‘murder hornets’…one bad thing just gets worse.

Synthetic ID fraud has a criminal constructing a completely new identity cobbling together personal identifiers from several different people. The address, SSN, date of birth, address, and name of separate people. Not one person but bits from a bunch of different unsuspecting people and often under a fictitious name. identity
Some call this ‘Frankenstein’ fraud. The fake buyer is literally assembled using a patchwork of personal info and because this new identity is usually cultivated over a period of a few years, it may not be obvious to those trying to root out the crime.

Here are 4 ways your dealership can safeguard against synthetic identity fraud at a time when dealerships can least afford to have deals unwound…

Look Deeper at the Credit Report

One way to catch synthetic identity fraud is to look carefully at how long the buyer has had open credit versus their age. If your buyer is 45 years old and has he/her first credit account 5 years ago, that’s likely a synthetic identity. Anyone that old would have deeper credit history than just a few years.

If the oldest credit record is as an authorized user, that could also be an indicator of a fake identity. Criminals will use authorized user access as an easy way to start building out the credit profile.

CRO’s Can Give it Away, Too

Not to say that all credit repair organizations are bad but unfortunately many have a dubious reputation in the industry. When criminals have constructed their synthetic identity, CRO’s can be used to help repair profiles to give an air of legitimacy on the credit report.

Watch Those Driveway Deliveries

One of the more obvious tip-offs for synthetic identity criminals is how they prefer to communicate with the dealership throughout the transaction. Most like to avoid direct human contact if possible and prefer text, fax, or email rather than have a conversation on the phone or meeting in person.

In the current online state dealerships work within now, more online transactions will be had due to customers reservations about coming to a crowded store. If your dealership is leveraging an online F&I experience and doing at-home ‘touchless’ deliveries, consider having a mobile notary available if possible. The risks are too great that the person who takes the keys are not the person represented on the online credit application. It may seem like a pricey step but if the warning signs are there, it will be worth it.

Watch, Prepare, Check

Here we are going to look at a set of easy precautions that involve the steps the dealership should take within its four walls. First, if you don’t already do background checks now on staff, consider it soon. Anyone from sales to porters could get access to personal info that can be sold to someone who specializes in synthetic ID fraud.

Second, consider setting up video in the F&I office or a program that require a thumbprint as part of the application process. Buyers who are using a fake identity are much less likely to go through with the transaction if they are being watched or have to give a personal identifier that is unique and can’t be faked like a fingerprint.

Lastly, empower your F&I staff with a strong Red Flag program and training to help them spot this kind of fraud early. If your F&I product suppliers offer this as part of their compliance trainings, take advantage of it as soon as possible. Many F&I schools are still virtual for now during COVID-19 but as some start to opening back up for in person classes, see if they have this available.

Another point…finance companies are usually the ones to sound the alarm since the synthetic identity is not stolen from one individual as is the case with identity theft. One person alerts the authorities after seeing something on a credit report. This crime is much more difficult to uncover since there is no one person who would ever know that a piece of their personal info has been used.

Setting your store up to catch this fraud before it hits the bottom line is the key. COVID-19 has dealers who were not already immersed in online F&I back on their heels as it is but having to worry about fake buyers taking advantage of this new reality can cost dearly. No dealer can afford to lose a deal right now and every step that can be taken to protect the integrity of online deals is a valuable one.



Did you enjoy this article from Kristine Cain? Read other articles from her here.

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Are Sallie Mae Student Loans Federal or Private?

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When you hear the name Sallie Mae, you probably think of student loans. There’s a good reason for that; Sallie Mae has a long history, during which time it has provided both federal and private student loans.

However, as of 2014, all of Sallie Mae’s student loans are private, and its federal loans have been sold to another servicer. Here’s what to know if you have a Sallie Mae loan or are considering taking one out.

What is Sallie Mae?

Sallie Mae is a company that currently offers private student loans. But it has taken a few forms over the years.

In 1972, Congress first created the Student Loan Marketing Association (SLMA) as a private, for-profit corporation. Congress gave SLMA, commonly called “Sallie Mae,” the status of a government-sponsored enterprise (GSE) to support the company in its mission to provide stability and liquidity to the student loan market as a warehouse for student loans.

However, in 2004, the structure and purpose of the company began to change. SLMA dissolved in late December of that year, and the SLM Corporation, or “Sallie Mae,” was formed in its place as a fully private-sector company without GSE status.

In 2014, the company underwent another big adjustment when Sallie Mae split to form Navient and Sallie Mae. Navient is a federal student loan servicer that manages existing student loan accounts. Meanwhile, Sallie Mae continues to offer private student loans and other financial products to consumers. If you took out a student loan with Sallie Mae prior to 2014, there’s a chance that it was a federal student loan under the now-defunct Federal Family Education Loan Program (FFELP).

At present, Sallie Mae owns 1.4 percent of student loans in the United States. In addition to private student loans, the bank also offers credit cards, personal loans and savings accounts to its customers, many of whom are college students.

What is the difference between private and federal student loans?

When you’re seeking financing to pay for college, you’ll have a big choice to make: federal versus private student loans. Both types of loans offer some benefits and drawbacks.

Federal student loans are educational loans that come from the U.S. government. Under the William D. Ford Federal Direct Loan Program, there are four types of federal student loans available to qualified borrowers.

With federal student loans, you typically do not need a co-signer or even a credit check. The loans also come with numerous benefits, such as the ability to adjust your repayment plan based on your income. You may also be able to pause payments with a forbearance or deferment and perhaps even qualify for some level of student loan forgiveness.

On the negative side, most federal student loans feature borrowing limits, so you might need to find supplemental funding or scholarships if your educational costs exceed federal loan maximums.

Private student loans are educational loans you can access from private lenders, such as banks, credit unions and online lenders. On the plus side, private student loans often feature higher loan amounts than you can access through federal funding. And if you or your co-signer has excellent credit, you may be able to secure a competitive interest rate as well.

As for drawbacks, private student loans don’t offer the valuable benefits that federal student borrowers can enjoy. You may also face higher interest rates or have a harder time qualifying for financing if you have bad credit.

Are Sallie Mae loans better than federal student loans?

In general, federal loans are the best first choice for student borrowers. Federal student loans offer numerous benefits that private loans do not. You’ll generally want to complete the Free Application for Federal Student Aid (FAFSA) and review federal funding options before applying for any type of private student loan — Sallie Mae loans included.

However, private student loans, like those offered by Sallie Mae, do have their place. In some cases, federal student aid, grants, scholarships, work-study programs and savings might not be enough to cover educational expenses. In these situations, private student loans may provide you with another way to pay for college.

If you do need to take out private student loans, Sallie Mae is a lender worth considering. It offers loans for a variety of needs, including undergrad, MBA school, medical school, dental school and law school. Its loans also feature 100 percent coverage, so you can find funding for all of your certified school expenses.

With that said, it’s always best to compare a few lenders before committing. All lenders evaluate income and credit score differently, so it’s possible that another lender could give you lower interest rates or more favorable terms.

The bottom line

Sallie Mae may be a good choice if you’re in the market for private student loans and other financial products. Just be sure to do your research upfront, as you should before you take out any form of financing. Comparing multiple offers always gives you the best chance of saving money.

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Tips to do some fall cleaning on your finances

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Wealth manager, Harry Abrahamsen, has five simple ways to stay on top of the big financial picture.

PORTLAND, Maine — Keeping track of our financial stability is something we can all do, whether we have IRAs or 401ks or just a checking account. Harry J. Abrahamsen is the Founder of Abrahamsen Financial Group. He works with clients to create and grow their own wealth. Abrahamsen shares five financial tips, starting with knowing what you have. 

1. Analyze Your Finances Quarterly or Biannually

You want to make sure that your long-term strategy is congruent with your short-term strategy. If the short-term is not working out, you may need to adjust what you are doing to make sure your outcome produces the desired results you are looking to accomplish. It is just like setting sail on a voyage across the Atlantic Ocean. You know where you want to go and plot your course, but there are many factors that need to be considered to actually get you across and across safely. Your finances behave the exact same way. Check your current situation and make sure you are taking into consideration all of the various wealth-eroding factors that can take you completely off course.

With interest rates very low, now might be a good time to consider refinancing student loans or mortgages, or consolidating credit card debt. However, do so only if you need to or if you can create a positive cash flow. To ensure that you are saving the most by doing so, you must look at current payments, excluding taxes and insurance costs. This way you can do an apples-to-apples comparison.

The most important things to look for when reviewing your credit report is accuracy. Make sure the reporting agencies are reporting things actuary. If it doesn’t appear to be reporting correct and accurate information, you should consult with a reputable credit repair company to help you fix the incorrect information.

4. Savings and Retirement Accounts

The most important thing to consider when reviewing your savings and retirement accounts is to make sure the strategies match your short-term and long-term investment objectives. All too often people end up making decisions one at a time, at different times in their lives, with different people, under different circumstances. Having a sound strategy in place will allow you to view your finances with a macro-economic lens vs a micro-economic view. Stay the course and adjust accordingly from a risk and tax standpoint.

RELATED: Financial lessons learned through the pandemic

A great tip for lowering utility bills or car insurance premiums: Simply ask! There may be things you are not aware of that could save you hundreds of dollars every month. You just need to call all of the companies that you do business with to find out about cost-cutting strategies. 

RELATED: Overcome your fear of finances

To learn more about Abrahamsen Financial, click here

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How to Get a Loan Even with Bad Credit

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Sana pwedeng mabura ang bad credit history as quickly and easily as paying off your utility bills, ‘no? Unfortunately, it takes time. And bago mo pa maayos ang bad credit mo, more often than not, kailangan mo na namang mag-avail ng panibagong loan. 

Good thing you can still get a loan even with bad credit, kahit na medyo limited ang options. How do you get a loan if you have bad credit? Alamin sa short guide na ito. 

For more finance tips, visit Moneymax.

 

 

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